Spain's government was meeting Friday to approve a new financial sector reform that will create a "bad bank" to contain toxic property investments and will give the central bank more powers to shut down troubled lenders.

Friday's financial reform measures will be the fifth such package Spain has introduced since the economic crisis began in 2008.

The creation of the bad bank is among conditions set by the other 16 countries that also use the euro in exchange for a (EURO)100 billion ($125 billion) loan for Spanish lenders hit by the country's real estate crash.

The country is battling to convince investors it can handle its finances and avoid following Greece, Ireland, Portugal and Cyprus in requesting a government bailout.

Suffering near 25 percent unemployment, it got yet another dose of bad news Friday as the Bank of Spain reported a net capital outflow of (EURO)56.6 billion in June, topping an exit of (EURO)41.3 billion in May.

It said outflow for the first six months of 2012 was nearly (EURO)220 billion compared to an intake of (EURO)22 billion for the same period last year.